A.R.S. tit. 3 ch. 3 — Arizona Revised Statutes Title 3 Chapter 3 — Marketing And Produce Safety

3-401. Definitions In this article, unless the context otherwise requires: 1. "Affected commodity" means the specific citrus, fruit or vegetable that is regulated pursuant to article 2 or 4 of this chapter and that is subject to the marketing agreement or order or the proposed marketing agreement or order. 2. "Affected person" means a producer or shipper of an affected commodity. 3. "Associate director" means the associate director of the citrus, fruit and vegetable division of the department. 4. "Marketing agreement" or "agreement" means an agreement that is developed by producers or shippers of the affected commodity and that is entered into by the director pursuant to this article. 5. "Marketing commission" or "commission" means the marketing commission established under section 3-413. 6. "Marketing committee" or "committee" means a marketing committee established by a marketing agreement according to section 3-426. 7. "Marketing order" or "order" means an order that is developed by producers or shippers of the affected commodity and that is issued by the director pursuant to this article. 8. "Person" means any individual, firm, corporation, trust, association or partnership. 9. "Producer" means a person that has a financial interest in producing or causing citrus, fruit or vegetable commodities to be produced for market in commercial quantities. 10. "Shipper" means a person that engages in shipping, transporting, selling or marketing citrus, fruits or vegetables under the shipper's own registered trademark or label or a person that first markets the fruits or vegetables for the producer. 11. "Volume" means cartons or the equivalent weight of Arizona-grown products marketed in the preceding marketing season. 12. "Written assent" means a signed statement of an affected person consenting to the terms of a marketing order. 3-402. Policy or purpose Marketing agricultural products of this state is in the public interest. The policy and purpose of this article are to promote the general welfare of this state by enabling and encouraging fresh fruit and vegetable producers and shippers to help themselves. This state will benefit by ensuring the availability of high quality fruit and vegetables and in establishing orderly, equitable, efficient and unhampered marketing, grading and standardizing of the commodities as well as providing for research, promotion and educational programs involving fresh fruit and vegetables. 3-403. Exemptions This article shall not apply to article 2.1, 4.2 or 4.3 of this chapter. 3-404. Marketing order and marketing agreement programs A. A marketing order or marketing agreement applies to all producers and shippers included under the terms of the order or agreement. B. A marketing order or marketing agreement may: 1. Provide for establishing standards for the quality, condition, size or maturity of a commodity marketed in or shipped outside this state. Standards shall not be less than the standards provided by articles 2 and 4 of this chapter and rules adopted pursuant to those articles. 2. Provide for establishing, and verifying compliance with, food safety standards. 3. Provide for plans to conduct programs for advertising and sales promotion. 4. Provide for research studies to improve production, distribution and marketing. 5. Provide for educational programs designed to inform producers and shippers about quality improvement or about practices, procedures and methods used in production, processing and marketing. 6. Provide for research and educational programs concerning health, food, nutritional, therapeutic and dietetic qualities or for developing new food products or new uses for agricultural products. 7. Provide programs to control and eradicate insects, disease and parasites. 8. Provide for establishing and regulating the use of an official brand, trade name or label. 9. Provide programs to gather and disseminate weather data to producers. 10. Provide for developing and funding programs, jointly or cooperatively, with public or private organizations, including funding marketing information services. 11. Authorize persons to participate in hearings regarding agricultural chemicals that are used by the affected commodity. 3-405. Contents of a marketing order A. A marketing order shall: 1. Describe the territory of this state to be regulated by the marketing order. 2. State the type of marketing order program. 3. Establish a marketing commission, prescribe the number of commission members and specify an official name of the commission. 4. State the maximum rate of assessments in amounts sufficient to cover all expenses of the marketing order if assessments are required. 5. State whether the marketing order applies to producers or shippers, or both. If the marketing order applies to shippers only, shippers shall pay any assessments owing and shall not charge producers any assessments for the marketing order. If the marketing order applies to both producers and shippers, the shippers shall not charge producers any assessments that the shipper is required to pay pursuant to the marketing order. 6. Apply uniformly to all persons of the same category. 7. State whether the costs of the public meeting and referendum or written assent procedures shall be reimbursed by any assessments received if the marketing order is approved. 8. State the amount of time an inspector may hold a lot found to be in violation of the marketing order and specify the time period allowed to recondition a product pursuant to section 3-420. B. The marketing order may apply to more than one commodity and may include any other relevant information. 3-406. Initiation of the marketing order process A. To initiate or substantially change a marketing order, an affected person shall file a petition with the department signed by ten per cent of producers or shippers, or both producers and shippers, of the affected commodity that is the subject of the proposed marketing order. The petition shall state: 1. The affected commodity to be regulated by the marketing order. 2. A description of the territory of this state to be regulated by the proposed marketing order. 3. The category of persons to be regulated by the marketing order. 4. A draft of the proposed marketing order. 5. The proposed method of voting. 6. Any other relevant information. B. Within thirty days after receiving the petition, the department shall initiate developing a department list and shall prepare a budget to handle the petition. The department shall require a deposit from the petitioners to cover the costs of the public meeting and referendum or written assent procedures. The deposit may be reimbursed by any assessments received if the marketing order is approved. 3-407. Official department list A. The department shall compile a list for the purposes of notice and referendum or written assent procedures. The list shall include the names and addresses of all affected persons and the quantity of the affected commodity produced or shipped by the affected person in the two years preceding the notice or for a lesser time if the affected person has not produced or shipped the affected commodity for the preceding two years. B. In compiling the list, the department may use records required to be kept by shippers and records reported to citrus, fruit and vegetable standardization by producers and shippers pursuant to articles 2 and 4 of this chapter and rules adopted pursuant to those articles. The department may also notify known affected persons and may request them to respond within fifteen days after the notice with any additional necessary information. C. Information compiled by the department concerning individual totals of the affected commodity produced or shipped are confidential and are not subject to public disclosure. D. The list is conclusive in determining whether a marketing order has been approved by referendum or written assent, but an affected person who is not on the department list may register with the department and vote in a referendum or file a written assent if the person submits satisfactory evidence to the department to verify that the affected person is qualified to vote. 3-408. Public meeting; notice A. A public meeting on the petition shall be held within sixty days after the department receives the petition. B. Notice shall be sent to all affected persons on the department list and interested parties five to thirty days before the date of the public meeting. The notice shall state the time, date and place of the public meeting, the territory and commodity affected by the proposed marketing order and that the department will receive evidence and testimony concerning the department list and the proposed marketing order. C. The director, or the director's designee, shall conduct the public meeting and shall receive evidence and testimony concerning the proposed marketing order, the accuracy of the department list and the preferred method of voting on the proposed marketing order. The director or designee may receive evidence and testimony regarding the period of time required for filing written assents and any other relevant matters. D. The department may hold more than one public meeting if the affected commodity is grown in more than one area of this state. 3-409. Findings A. Based on testimony received at the public meeting, the director may recommend to the petitioners that the proposed marketing order be modified. If the petitioners make any substantial changes to the proposed marketing order after the public meetings, there shall be at least one additional public meeting to receive evidence and testimony regarding the revised marketing order. If the petitioners make only technical changes to the proposed marketing order, no additional public meeting is required. B. The director shall approve the marketing order if the director finds: 1. The same marketing agreement or marketing order program is not in effect for the affected commodity in the territory described by the proposed marketing order. 2. The marketing order complies with this article. 3. The costs of administering the proposed marketing order are met by the proposed assessment, if an assessment is necessary. C. The director shall issue a decision to be mailed to all persons appearing at the public meeting within twenty days after the conclusion of all public meetings. The decision shall state the director's findings, the method of voting on the proposed marketing order and a summary of the evidence and testimony presented at the public meetings. 3-410. Election procedures A. For an election conducted by referendum, each affected person entitled to vote on the department list shall receive a ballot. The ballot shall state or be accompanied by the text of the proposed marketing order, the date the ballot must be received by the department and the address to which the ballot shall be returned. The return date shall be between fifteen and thirty days after it is sent by the department. B. For an election conducted by written assents, each written assent shall specify that the written assent is being filed for the proposed marketing order, shall be dated and signed and shall clearly state the name, representative capacity and address of the person filing the written assent. C. Each person entitled to vote shall have one vote. If the proposed marketing order program regulates both producers and shippers, a person who is both a producer and shipper is entitled to one vote for each category. D. If both producers and shippers are to be regulated under the marketing order, voting shall be conducted independently for each category. The marketing order must be separately approved by each category to be effective for the category. E. Within ten days after the date for returning ballots for a referendum or within ten days after the close of the period for filing written assents, the department shall certify the election results. The department may not disclose how a particular person voted but shall disclose who voted and the total number of votes cast favoring the marketing order and the total number of votes cast opposing the marketing order. F. If approved, the marketing order is effective a minimum of five days after the notice is mailed to every affected person and to every person who requests notification. 3-411. Adoption of a marketing order A. If an election is conducted by a referendum, the marketing order shall be adopted or substantially changed if either: 1. Forty per cent of persons by volume or by number entitled to vote cast ballots and at least sixty-five per cent by number and fifty-one per cent by volume assent to the proposal. 2. Forty per cent of persons by volume or by number entitled to vote cast ballots and at least fifty-one per cent by number and sixty-five per cent by volume assent to the proposal. B. If an election is conducted by filing written assents, the marketing order shall be adopted or substantially changed if at least sixty-five per cent by number and fifty-one per cent by volume file a written assent to the proposed marketing order or at least fifty-one per cent by number and sixty-five per cent by volume file a written assent to the proposed marketing order. 3-412. Terminating a marketing order A. The marketing order expires on the fifth anniversary of its effective date unless specified otherwise in the marketing order, terminated previously or reapproved. B. If the marketing order has been substantially changed and the substantial change was submitted for approval to those persons regulated by the marketing order during the existing term of the marketing order, the marketing order's term is deemed reapproved from the date of the approval of the substantial change. C. During the last year the marketing order is effective, the department shall develop a list pursuant to section 3-407 and hold a public meeting pursuant to section 3-408 and an election pursuant to section 3-410. If the marketing order is reapproved, the new term begins on the expiration of the existing term. D. If at least forty per cent of the persons regulated by a marketing order, by volume and by number, present a petition to terminate the marketing order to the department and the signatures have been collected within ninety days, the department shall hold a public meeting pursuant to section 3-408 and depending on the testimony presented at the public meeting may submit the marketing order for an election pursuant to section 3-410 within sixty days after the filing of the petition. The petition shall state the text of the marketing order, the proposed method of voting and any other pertinent information. E. If a marketing commission, by a two-thirds vote of its membership, determines that it is no longer in the best interest of the persons regulated by the marketing order to continue the marketing order, the department shall submit the marketing order to an election pursuant to section 3-410 within thirty days after the marketing commission's vote. F. If a marketing commission does not meet for three consecutive marketing seasons, the director may call a public meeting pursuant to section 3-408 to determine whether an election on termination is necessary. G. If an election is conducted by referendum, the marketing order shall be terminated if a majority of the persons regulated by the marketing order by number and volume votes to terminate the marketing order. H. If an election is conducted by written assent, the marketing order shall be terminated if a majority of the persons regulated by the marketing order by number and volume files a written assent to terminate the marketing order with the department. I. The department shall certify the election results. The department may not disclose how a particular person voted but shall disclose who voted and the total number of votes cast in favor of the marketing order and the total number of votes cast opposing the marketing order. J. If the department certifies that the marketing order shall be terminated pursuant to the results of the referendum or written assent, the marketing order terminates five days after the notice is mailed to every person regulated by the marketing order and persons who request notification. K. A marketing order shall not be submitted for termination until one year after an election. 3-413. Marketing commission; appointment; term A. The marketing commission is composed of three to nine members with rotating terms of three years. Two-thirds of the members shall be appointed collectively by the director and associate director, from nominations of affected persons or representative commodity associations and one-third shall be selected by the other members of the marketing commission. B. Members shall be selected to represent areas of this state that produce the affected commodity on the basis of the volume of total production in this state for the affected commodity. C. The marketing commission shall be composed of persons who are regulated by the marketing order and shall include both producers and shippers if the marketing order regulates both categories. D. Commission members are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2. 3-414. Powers and duties of a marketing commission or marketing committee A. A marketing commission or marketing committee shall: 1. Collect, receive and disburse any monies to be used to administer a marketing order or marketing agreement. 2. Annually elect a chairman, secretary and treasurer from among its members. 3. Meet at least twice annually or at additional times called by the chairman or when requested by a quorum of the marketing commission or marketing committee. 4. Keep a permanent record of its proceedings and make these records available for public inspection for any lawful purpose. 5. Prescribe any assessments to be assessed within the limits prescribed in this article, the marketing order or the marketing agreement. B. A marketing commission shall: 1. Prepare for the regulated commodity an annual report of its activities, receipts and expenditures. A copy of the annual report shall be available to any interested person on request. 2. Organize and administer any election called under this article or the marketing order. C. A marketing commission or marketing committee may: 1. Sue and be sued as a marketing commission or marketing committee, without individual liability, for acts of the marketing commission or marketing committee within the scope of the powers and duties conferred on it by this article, the marketing order or the marketing agreement. 2. Enter into contracts to carry out the purposes of this article, the marketing order or the marketing agreement. 3. Appoint committees or subcommittees of the marketing commission or marketing committee, ex officio marketing commission or marketing committee members or advisory groups composed of representatives from organizations, institutions or businesses related to or interested in the regulated commodity. 4. Employ or retain and fix the compensation of a qualified person or qualified entity to manage the marketing order or marketing agreement, on behalf of the marketing commission or marketing committee, and other personnel that are necessary to carry out the provisions of this article, the order or the agreement. 5. Cooperate with any local, state or nationwide organization or agency engaged in work or activities similar or related to those of the commission or the committee and enter into contracts with the organizations or agencies for carrying on joint programs. 6. Make grants to research agencies to finance appropriate studies, or to purchase or acquire equipment and facilities consistent with the marketing order or marketing agreement. 7. Act jointly and in cooperation with this state or any other state or the federal government and spend monies to administer any program deemed by the commission or committee to be beneficial to the affected commodity. 8. Accept grants, donations, contributions, gifts, property or services or other assistance from public or private sources. 9. Provide educational materials to: (a) Interested parties that are not affected persons at a charge fixed by the commission or committee commensurate with the cost of compilation, publication and issuance. (b) Public officials without charge. 10. Return assessments to affected persons on a pro rata basis to the extent that monies collected exceed budgeted expenses. 11. Adopt rules necessary to promptly and effectively administer this article. Title 41, chapter 6 does not apply to rule making under this article, but the commission or committee shall provide fifteen days' advance notice of the meeting at which rules will be adopted. The commission or committee shall receive public testimony at the meeting regarding the rules. 12. Refer to persons regulated under a marketing order for an advisory vote the question of setting assessments or establishing or continuing any program authorized by the order. 13. Investigate and prosecute in the name of this state any legal action to enforce the collection or ensure payment of the authorized assessments. 14. Gather data or any other information the commission or committee deems necessary to administer and enforce the order or agreement. 15. Receive complaints of violations of the order or agreement and refer the complaints to the proper authorities. 16. Provide for an annual audit of its accounts by a qualified public accounting firm and, if an audit or financial statement is prepared, make the audit or financial statement available to any affected person and the auditor general on request. 3-415. Administrative services; interagency agreements; reimbursement A. The marketing commission or marketing committee may employ staff at a rate of compensation determined by the commission or committee, to serve at the pleasure of the commission or committee, and shall prescribe the terms and conditions of employment of employees as necessary to perform the functions prescribed by this article, the marketing order or the marketing agreement. All employees of the commission or committee are exempt from title 38, chapter 4, article 1 and title 41, chapter 4, articles 5 and 6 and are not under the jurisdiction of the department of administration. B. The commission or committee may also enter into an interagency agreement with the department to provide necessary administrative services to the commission or committee, including: 1. Providing secretarial and other services necessary for the commission or committee to carry out its activities. 2. Establishing separate operating accounts for the commission or committee. 3. Providing necessary financial and accounting services to the commission or committee, including the issuance of checks, payment of bills approved by the commission or committee, annual audits, expenditure and receipt reports whether monthly or annually, preparation of annual budget and any other activities requested by the commission or committee. 4. Receiving mail and other communication for the commission or committee. 5. Receiving monies authorized under this article for deposit in the appropriate trust funds for the exclusive purpose of implementing, continuing and supporting the respective marketing order or marketing agreement. The commission or committee shall administer the trust fund as trustee. The state treasurer shall accept, separately account for and hold in trust any monies deposited in the state treasury, which are considered to be trust monies as defined in section 35-310 and which shall not be commingled with any other monies in the state treasury except for investment purposes. On notice from the commission or committee, the state treasurer shall invest and divest any trust fund monies deposited in the state treasury as provided by sections 35-313 and 35-314.03, and monies earned from investment shall be credited to the trust fund. The beneficiary of the trust is the agricultural program established by the marketing order or marketing agreement. The trust fund shall be used solely for those purposes on the order of the commission or committee. Surplus monies, including any unexpended and unencumbered balance at the end of the fiscal year or at the termination of the marketing order or agreement, do not revert to the state general fund. 6. Accepting donated monies on behalf of the commission or committee to be credited to the account of the commission or committee. 7. Providing space for the meetings of the commission or committee. 8. Providing any other administrative services that the commission or committee requests or finds necessary. C. If the department performs any function under this article, it acts as the agent of the marketing commission or marketing committee and has no authority or control over the commission or committee or the commission's or committee's employees or assets. The commission or committee shall reimburse the department for any administrative services the department provides from the monies received under the marketing order or marketing agreement in an amount agreed on by the commission or committee and the director. Any services provided by citrus, fruit and vegetable standardization or the department in the normal scope of services are not subject to reimbursement from a marketing commission or marketing committee. 3-416. Indemnification of marketing commission or marketing committee members Each member or employee of a marketing commission or marketing committee is indemnified by the commission or committee against reasonable costs and expenses, including attorney fees, incurred by him in connection with any action, suit or proceeding to which he may be a party by reason of being or having been a member or employee of the commission or committee, except in relation to matters as to which he is adjudged in such action, suit or proceeding to have acted in bad faith as a commission or committee member or employee. The right of indemnification is in addition to other rights to which the member or employee is entitled as a matter of law. 3-417. Assessments; collection; budget A. The annual assessment rate shall not exceed five per cent of the annual gross sales dollar value of the affected commodity determined by the preceding marketing season. Not more than two per cent of the annual gross sales dollar value of the affected commodity may be used to pay costs associated with administering the marketing order. Assessment rates may be set on a per carton or equivalent basis. B. Each marketing order shall state a method of collection. For the initial year, an advance deposit of not more than ten per cent of the total assessments owing may be collected from affected persons based on the preceding marketing season. If the marketing order affects producers only or if the marketing order affects both producers and shippers, the shipper shall withhold the assessments owed by the producer pursuant to the marketing order. The shipper is a trustee of the assessments until they are paid to the marketing commission. If the marketing order affects producers only, a producer is responsible for paying the assessments unless the assessments are withheld for payment by the shipper. C. Each affected person shall keep a complete and accurate record of all of the affected commodity sold by the affected person. The records shall contain the information required to be kept for the citrus, fruit and vegetable trust fund pursuant to articles 2 and 4 of this chapter and rules adopted pursuant to those articles. D. Except for the first year of operation, on or before July 1 of each year, the marketing commission or marketing committee shall set an assessment according to the maximum rate of assessment established by this article, the marketing order or marketing agreement. Before establishing the assessment rate, the commission or committee shall establish an annual budget. The budget is effective on approval of the commission or committee. E. Title 41, chapter 6 does not apply to setting and collecting the assessment under this section, but the commission or committee shall provide fifteen days' advance notice of the meeting at which the assessment will be adopted and the amount of the proposed assessment. The commission or committee shall receive public testimony at the meeting regarding the assessment. 3-418. Failure to pay assessment; penalty; hearing; violation; classification A. A person who is required to pay assessments pursuant to this article, a marketing order or a marketing agreement and who fails to pay the assessments within sixty days after the billing shall be assessed a penalty of ten per cent of the amount of the total assessments owing and two per cent interest per month on the unpaid balance. The attorney general may collect assessments, penalties and interest on the request of the marketing commission or marketing committee. B. The person who fails to pay the required assessments may request a hearing before the marketing commission or marketing committee acting as an administrative law judge pursuant to title 41, chapter 6, article 10 to dispute or determine the amount of the assessments, penalty or interest imposed. The commission or committee shall hold a hearing if requested. The commission or committee, after the hearing, shall enter its order determining the amount of any assessments, penalty or interest. The person shall pay the assessments, penalty and interest assessed within ten days after the notice of the commission's or committee's decision. C. A person who knowingly fails to pay or remit any monies due or collected as required in this article and the marketing order is guilty of a class 2 misdemeanor. 3-419. Deposit of assessments; use on termination A. Monies collected pursuant to this article shall be deposited in the marketing commission's or marketing committee's accounts to be administered and disbursed by the commission or committee for the purposes prescribed in this article. Monies collected pursuant to a marketing order or marketing agreement may not be used for any purpose other than the order or agreement. B. The monies in a marketing commission or marketing committee account may be invested pursuant to section 35-313. Interest earned on these monies shall be credited to the marketing commission or marketing committee account. C. If monies are unexpended at the end of a fiscal period, the marketing commission or marketing committee shall carry the monies forward to the next fiscal period. D. If the marketing order or marketing agreement is terminated and the expenses are paid, monies shall be returned to the affected persons pro rata unless the amounts are too small to be practicable or may be expended by the marketing commission or marketing committee on any program consistent with the marketing order or marketing agreement. E. No specific legislative appropriation is necessary to operate a marketing commission or marketing committee. 3-420. Inspection and enforcement A. An inspector, discharging his duties, may enter every facility during operating hours or commercial vehicles in this state where an affected commodity is produced, stored, packed, delivered for shipment, being transported or offered for sale and inspect representative samples of the affected commodity to determine compliance with a marketing order or marketing agreement. B. If an inspector believes a marketing order or marketing agreement has been violated in terms of quality, condition, size, maturity or pack, the inspector may hold the lot pursuant to the time specified in the marketing order or marketing agreement. C. If the lot does not comply with the marketing order or marketing agreement, the department shall tag the lot and notify the person in possession. The owner of the lot may recondition the lot within the time specified in the marketing order or marketing agreement, and if compliance is achieved, the lot shall be released by the department. D. If the owner does not recondition and bring the lot into compliance within the time prescribed in the marketing order or marketing agreement, the inspector, after receiving written consent of the owner may divert the lot to other lawful purposes or destroy the lot. E. If the owner refuses to give consent to the inspector to divert or destroy the lot and the owner does not recondition and bring the lot into compliance within the time prescribed in the marketing order or marketing agreement, the inspector may attach a notice of disposal to the lot that is not in compliance with the marketing order or marketing agreement and deliver a copy of the notice of disposal to the owner. F. The notice of disposal requires the owner to properly dispose of the lot by: 1. Diverting it to another lawful purpose, such as contributing it to a nonprofit charitable organization. 2. Selling it, as long as it is not sold in regular channels of trade, such as for processing. 3. Destroying it. 3-421. Violations; civil penalties; hearing; court action A. A person who violates a marketing order or marketing agreement three times during a marketing season is subject to a civil penalty of at least fifty dollars but not more than five hundred dollars for the first offense and a civil penalty of at least one hundred dollars but not more than one thousand dollars for subsequent offenses. A person who intentionally violates a marketing order is subject to a civil penalty of at least one thousand dollars but not more than ten thousand dollars. Each day of violation is a separate offense. A person who knowingly furnishes a false report is subject to a civil penalty of five hundred dollars. B. For civil actions, an administrative hearing may be obtained pursuant to title 41, chapter 6, article 10. C. The director, marketing commission or marketing committee may apply to the superior court for a temporary restraining order or injunction if there are three or more violations of a marketing order, marketing agreement or this article or any rules adopted pursuant to this article during a marketing season. If the director, marketing commission or marketing committee is successful in the court action, the defendant may be required to pay the costs of prosecution. A court action may be brought in the county where the defendant resides or where the act or omission occurred or in the county of the state capital. D. An action for penalties must be commenced within three years after the violation. The suspension, substantial change or termination of any marketing order or marketing agreement does not suspend or terminate any causes of action that have accrued under it. 3-422. Records and reports A. The department may require affected persons to maintain records about their operation and furnish the records on request to the marketing commission, marketing committee or department to ensure compliance with a marketing order or marketing agreement. B. The marketing commission, marketing committee or hearing officer may hold a hearing in which persons may be required to testify under oath. C. All information concerning the businesses of individual producers and shippers, including cartons or equivalent marketed, the dollar value of gross annual sales and audit and inspection records, is not a public record and shall not be disclosed except: 1. By court order. 2. To a person who presents a release signed by the producer or shipper. 3. In an annual report or similar document if individual producers and shippers are not identifiable. 4. In relation to a judicial or administrative proceeding for the purpose of enforcing or administering an order or agreement. D. All results of elections for a marketing order, marketing agreements, contracts entered into by a marketing commission or marketing committee and annual reports are public records. 3-423. Payment of costs of hearing on a marketing order If an affected person requests a hearing on a marketing order pursuant to title 41, chapter 6, article 10, the affected person shall pay all costs of the hearing. 3-424. Initiation of the marketing agreement process; contents A. Two or more persons who produce or ship the affected commodity shall file an application with the director together with a filing fee of five hundred dollars to cover the costs of the public meeting. If the public meeting costs less than five hundred dollars, the difference shall be refunded to the applicants. The application shall state: 1. The affected commodity to be regulated by the marketing agreement. 2. A description of the territory of this state to be regulated by the marketing agreement. 3. The category of persons to be regulated by the marketing agreement. 4. A draft of the proposed marketing agreement. 5. Any other relevant information. B. A marketing agreement shall: 1. Describe the territory of this state to be regulated by the marketing agreement and the persons to be regulated by the marketing agreement. 2. State the type of marketing agreement program. 3. Specify the number of marketing committee members and the official name of the committee if a marketing committee is to be established. 4. Provide for the rate of assessments in amounts sufficient to cover all expenses of the marketing agreement if assessments are required and specify a method of collecting assessments. 5. State whether the marketing agreement applies to producers or shippers, or both. If the marketing agreement applies to shippers only, shippers shall pay any assessments owing and shall not charge producers any assessments for the marketing agreement. If the marketing agreement applies to both producers and shippers, the shippers shall not charge producers any assessments that the shipper is required to pay pursuant to the marketing agreement. 6. Apply uniformly to all persons of the same category. 7. State whether the costs of the filing fee will be reimbursed by any assessments received pursuant to the marketing agreement. 8. State the amount of time an inspector may hold a lot found to be in violation of the marketing agreement and specify the time period allowed to recondition the product pursuant to section 3-420. C. The marketing agreement may apply to more than one commodity and may state any other relevant information. 3-425. Public meeting; notice; findings A. At least five days but not more than twenty days after the application is filed with the department, the director, or the director's designee, shall hold a public meeting. A notice shall be sent to all persons that may be affected by the proposed marketing agreement that states the time, date and place of the public meeting and that the department will receive evidence and testimony concerning the proposed marketing agreement. An official department list of affected persons does not have to be prepared. B. At the public meeting, the director, or the director's designee, shall receive evidence and testimony concerning the proposed marketing agreement. The director may hold more than one meeting if the affected commodity is grown in more than one area of this state. C. Based on testimony received at a public meeting, the director may recommend to the petitioners that the proposed marketing agreement be modified. If the petitioners make any substantial changes to the proposed marketing agreement after the public meeting, there must be at least one additional public meeting to receive evidence and testimony regarding the revised marketing agreement. If the petitioners make only technical changes to the proposed marketing agreement, no additional public meeting is required. D. The director shall approve the marketing agreement if the director finds: 1. The same marketing agreement or marketing order program is not in effect for the affected commodity in the territory described by the proposed marketing agreement. 2. The marketing agreement complies with this article. 3. The signatories of the marketing agreement have sufficient monies to defray expenses of formation, administration and enforcement of the marketing agreement. 4. The marketing agreement is signed by all participants. 3-426. Marketing committee If a marketing committee is established by the marketing agreement, the marketing committee shall be composed of three to nine signatories of the marketing agreement who are elected by all of the signatories of the marketing agreement. 3-427. Application of marketing order provisions to marketing agreements A. The voting requirements and termination provisions prescribed for marketing orders by this article do not apply to marketing agreements. B. Sections 3-417, 3-418, subsections A and B and 3-419 apply to marketing agreements only if an assessment is made under the agreement. C. Sections 3-420 and 3-421 apply to marketing agreements. 3-428. Approval of a marketing agreement; amendments; term A. A marketing agreement applies only to producers and shippers who sign the marketing agreement and is effective on the approval of the director. Additional signatories may be added with the approval of the director. If signatories withdraw, the director may review and terminate the marketing agreement if not enough signatories remain to defray expenses of the marketing agreement. B. A marketing agreement may be amended at any time with the approval of the director and all of the signatories. If a signatory fails to vote on a proposed amendment within thirty days after notice of the proposed amendment, the signatory is deemed to have approved the amendment. C. A marketing agreement is binding on signatories for a period specified in the marketing agreement, but not longer than twelve months. The marketing agreement may be renewed for an additional three terms without the requirement of a public meeting provided in section 3-425. D. If a marketing agreement remains effective for a fourth term, the department must hold a public meeting pursuant to section 3-425 during that term. The proposed marketing agreement may amend the current agreement. If the marketing agreement is reapproved, the new term begins on the expiration of the existing term. 3-429. Application of administrative procedures act Title 41, chapter 6, article 10 applies to administrative procedures prescribed by this article. 3-430. Transfer of property on termination All property, except monies, of a terminated commission or committee shall be transferred to the department. The department may use or convey the property for the benefit of another commission or committee or may dispose of the property at the director's discretion. 3-441. Definitions In this article, unless the context otherwise requires: 1. "Associate director" means the associate director of the citrus, fruit and vegetable division of the department. 2. "Bulk lot" means citrus fruit that is not contained in a box, carton, crate or lug but may be contained in a bin or a similar container and is set apart from citrus fruit that is packaged in containers authorized pursuant to this article or rules adopted pursuant to this article. 3. "By-products" means any product from citrus fruit that is commercially processed or manufactured for resale. 4. "Citrus" or "citrus fruit" means the fruit of any orange, lemon, lime, grapefruit, tangerine, kumquat or other citrus tree that produces edible citrus fruit suitable for human consumption. 5. "Commission merchant" means a person that receives on consignment or solicits from the producer any citrus fruit for sale on commission on behalf of the producer or accepts any citrus fruit in trust from the producer for the purpose of resale. Commission merchant does not include a shipper. 6. "Containers" or "packages" means any container used for packing, shipping or selling citrus fruit. 7. "Dealer" means a person that sells, markets or distributes citrus fruit that the person purchased from a producer or markets as an agent, broker or commission merchant, except at retail. Dealer does not include a shipper. 8. "Lot" means a unit of identical or similar items that are grouped or consolidated in one or more containers for packaging or transporting or a cluster of identical or similar items that are included in the same shipping order, bill of lading or other itemized transport order. 9. "Packer" means a person, other than a producer, shipper or dealer, that is engaged in the business of packing any citrus fruit. 10. "Person" includes an individual, firm, association, partnership, trust or corporation. 11. "Producer" means a person that is engaged in this state in the business of producing or causing citrus fruit to be produced for market in commercial quantities. 12. "Shipper" means a person that ships, transports, sells or markets citrus fruit under the person's registered trademark or label or a person that first markets the citrus fruit on behalf of the producer. Shipper does not include a commission merchant. 3-442. Purpose and scope of article A. Producing quality citrus fruit in this state is in the public interest. To enhance the potential for domestic and international marketing of citrus fruit from this state, it is the policy and purpose of this article to enable and encourage producers and shippers to develop uniform grades and standards for citrus fruit and to allow inspections of citrus fruit produced or sold in this state. This article is vital to enhance and maintain domestic and international markets for citrus fruit grown in this state by protecting against exporting, importing and selling substandard citrus fruit and by ensuring that inferior produce does not compete with quality citrus fruit produced in this state. B. All citrus fruit, when being packed or placed in a container, after packing, when delivered for shipment, loaded, shipped, being transported, offered for sale or sold in a container or in bulk, including citrus fruit offered for sale in bulk by the grower to dealers for resale in bulk at retail or otherwise, shall conform to this article and rules adopted pursuant to this article. 3-443. Associate director; inspectors A. This article and the rules adopted pursuant to this article shall be enforced by the associate director. In addition to the powers conferred by this article, the associate director shall have the powers provided by articles 4, 4.1 and 4.3 of this chapter. B. The associate director shall instruct the inspectors with regard to the inspection of citrus fruit and the method of determining the maturity and condition of the citrus fruit, as provided by rules adopted pursuant to this article. C. Citrus, fruit and vegetable standardization and the office of commodities development and promotion shall cooperate in establishing and administering marketing orders and marketing agreements. 3-444. Inspectors; powers and enforcement procedures; warning notice; disposal notice; civil penalty A. Inspectors may enter any facility, during operating hours, or a commercial vehicle in this state where fresh citrus fruit is produced, stored, packed or delivered for shipment, is transported or is offered for sale and inspect representative samples of the fresh citrus fruit and containers in order to determine compliance with this article and rules adopted pursuant to this article. B. If all or part of a lot, including containers, fails to comply with this article or rules adopted pursuant to this article, the inspector may affix a warning notice to all or part of the lot stating the reason why it is held. Other than an inspector, a person may not detach, alter or destroy the affixed warning notice except by the authorization of the inspector, the associate director, the associate director's designee, the director or a court order. C. The inspector shall issue a notice of noncompliance to the person in possession of the lot or part of the lot that states: 1. A description of the lot or part of the lot. 2. The specific section of law on which the noncompliance is alleged. 3. The place where the lot or part of the lot is held. 4. The specific method of inspection, including the sample size. 5. The defect that caused the violation. 6. The percentage of defective product in the sample. 7. That the lot or part of the lot is subject to disposal if it is not reconditioned and brought into compliance within the time prescribed according to rules adopted pursuant to this article. D. If the person who is served with the notice of noncompliance does not own the lot, the person shall notify the inspector in writing of the name and address of the owner. If the person knowingly conceals the name or address of the owner, the person is liable for any loss to the lot that the owner sustains. E. If the lot is reconditioned and brought into compliance within the prescribed time period and the lot otherwise complies with this article and rules adopted pursuant to this article, the inspector shall remove the warning notice, issue a notice of compliance to the person in possession and release the lot for sale. F. If the owner does not recondition and bring the lot into compliance within the prescribed time period, the inspector, after receiving the written consent of the owner, may divert the lot or part of the lot to other lawful purposes or destroy the lot or part of the lot. G. If the owner refuses to give consent to the inspector to divert or destroy the lot or part of the lot and the owner does not recondition and bring the lot into compliance within the prescribed time period, the inspector may attach a disposal notice to the lot or part of the lot that violates this article or rules adopted pursuant to this article and deliver a copy of the disposal notice to the owner. The disposal notice requires the owner to properly dispose of the lot or part of the lot by: 1. Diverting it to another lawful purpose, such as contributing it to a nonprofit charitable organization. 2. Selling it, other than in regular channels of trade, such as for processing. 3. Destroying it. H. A person who violates the terms of a disposal notice is subject to a civil penalty of at least twenty-five dollars for each carton but not more than one thousand dollars. 3-445. Rulemaking; definition A. Pursuant to section 3-527.02, the associate director may recommend to the director for adoption rules that are not in conflict with this article as the associate director deems necessary to carry out this article. B. On recommendation of the associate director, the director shall prescribe: 1. Standards and grades for citrus fruit produced in this state and a standard for citrus fruit without specific standards pursuant to section 3-446. In establishing the specific standards, the associate director shall consider factors that apply to the product, including maturity, color, shape, size, firmness, freedom from decay, diseases, mechanical and plant pest injury and any other factors that indicate quality and condition. 2. The size, dimensions, labeling and markings of containers that are to be used to pack citrus fruit and the packing arrangements of the commodity in the container. 3. A permit system for experimental containers, experimental products and experimental packs, including an application, permit number, quantity allowed by the permit, duration of the permit and recordkeeping and renewal provisions. 4. Sampling rules for lots and containers of citrus fruit to reasonably produce a fair representation of the entire lot or container sampled. 5. The time period allowed to recondition citrus fruit pursuant to section 3-444. 6. Appropriate reporting and recordkeeping requirements for shippers, including: (a) Reporting totals for each citrus variety shipped. (b) A requirement for records to be retained for the preceding two years on the amount of each citrus variety sold by the shipper for each producer for purposes of reporting under article 1 of this chapter. (c) A requirement for records to be retained for the preceding year on the percentage ownership interest of each producer for each citrus variety sold by the shipper. 7. Appropriate reporting and recordkeeping requirements for commission merchants. C. For the purposes of this section, "year" has the same meaning prescribed in section 3-450. 3-446. Adopting new or revised standards; exception A. Twenty-five percent of the producers or shippers of a citrus fruit may petition the associate director to adopt a standard. B. Twenty-five percent of the producers or shippers of a citrus fruit for which a standard has been established by rule may petition the associate director to modify the standard. C. Within thirty days after receiving a valid petition under subsection A or B of this section, the associate director, after notifying all other known producers and shippers of the citrus fruit, shall hold a public meeting to receive comment on the proposed new standard. Within fifteen days after the meeting, the associate director shall either deny the petition in writing stating the reasons for denial or initiate rulemaking proceedings. D. This section does not apply to any commodity that is exempt from standardization under section 3-450. 3-447. Citrus, fruit and vegetable trust fund; administration A. The citrus, fruit and vegetable trust fund is established for the exclusive purpose of implementing, continuing and supporting the agricultural programs established by this article and article 4 of this chapter. The trust fund consists of revenues from assessments and other monies designated for deposit in the trust fund by this article and article 4 of this chapter. The trust fund shall be used solely for the purpose of administering and enforcing this article and article 4 of this chapter. B. The director shall administer the citrus, fruit and vegetable trust fund as trustee. The state treasurer shall accept, separately account for and hold in trust any monies deposited in the state treasury, which are considered to be trust monies as defined in section 35-310 and which shall not be commingled with any other monies in the state treasury except for investment purposes. On notice from the director, the state treasurer shall invest any trust fund monies deposited in the state treasury pursuant to sections 35-313 and 35-314.03, and all interest earned on these monies shall be credited to the trust fund. C. The beneficiaries of the trust are the agricultural programs established by this article and article 4 of this chapter. D. Monies in the citrus, fruit and vegetable trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. Surplus monies, including any unexpended and unencumbered balance at the end of the fiscal year, do not revert to the state general fund. E. The department shall make a detailed accounting on or before November 1 of each year of all monies paid into and disbursed from the citrus, fruit and vegetable trust fund during the preceding fiscal year and transmit the report to the citrus, fruit and vegetable advisory council on or before December 1. F. Any monies remaining unexpended in the citrus, fruit and vegetable trust fund on June 30 of each year shall be carried forward to the following year, and the associate director shall take that amount into account in computing the assessments for that year. 3-448. Assessments; procedures; failure to pay; penalty and interest; hearing; definition A. In order to provide the necessary monies to enforce this article and article 4 of this chapter, the associate director shall assess a charge against each shipper in an amount of not more than one and one-fourth cents per standard carton, or the equivalent weight, of each kind of fruit and vegetable, including citrus, that is shipped and regulated under this article and article 4 of this chapter. For bulk shipments of citrus used for by-products with destinations both inside and outside this state, a charge is assessed of not more than two dollars for each lot. B. All monies collected from the assessments under this section shall be deposited in the citrus, fruit and vegetable trust fund. C. The associate director, pursuant to section 3-527.02, shall set the amount of the charges under this section annually with the approval of the director, but not in amounts greater than necessary to provide revenues to defray all of the proper expenses of carrying out this article and article 4 of this chapter. The associate director may establish assessments for each commodity based on the time that is necessary to inspect the commodity. D. Before the associate director may set or the director may approve an increase in the assessment, the associate director shall provide thirty days' advance notice of a public hearing and the amount of the proposed assessment to all shippers that are licensed under sections 3-449 and 3-492 and to any other interested party. The associate director shall receive testimony at the hearing regarding the proposed increase in the assessment. Title 41, chapter 6 does not apply to setting or collecting assessments under this section. E. The associate director shall compute the amount of assessments within the limits of this section and may bill the assessments twice monthly. Each shipper shall pay the charges to the associate director within sixty days after the billing date. F. A shipper that fails to pay the required assessment within sixty days after the billing date is subject to a penalty of ten percent of the amount of the total assessment plus interest at a rate of two percent per month on the unpaid balance. G. A shipper may request a hearing before the associate director to protest the amount of assessment, penalty or interest imposed. If requested, the associate director shall hold the hearing. After the hearing the associate director shall enter an order determining the amount of the fee, penalty and interest. The shipper shall pay that amount within ten days after notice of the associate director's determination unless the decision is appealed to the director. The shipper may appeal the decision of the associate director to the director. If the associate director's decision is appealed, the director shall review the record of the hearing and affirm, modify or reverse the associate director's decision. H. For the purposes of this section, in addition to the definition of shipper in section 3-441, "shipper" also includes shipper as defined in section 3-481. 3-449. Annual licensing; fees; application; penalty A. A person may not transact business as a citrus fruit dealer or shipper without first obtaining a license as provided in this article. The license expires on August 1 of each year and is renewable annually. The license fee shall be determined according to the annual gross sales based on the dealer's or shipper's previous fiscal year as follows: 1. If the annual gross sales are five hundred thousand dollars or more, the annual fee is four hundred fifty dollars. 2. If the annual gross sales are between two hundred thousand dollars and five hundred thousand dollars, the annual fee is three hundred dollars. 3. If the annual gross sales are two hundred thousand dollars or less, the annual fee is one hundred fifty dollars. 4. If the person was not in business the previous fiscal year, the annual fee is one hundred fifty dollars. B. If a person engages in business in more than one category as a dealer or shipper, the license designation shall be based on the category in which most of the licensee's business is condu